Table of Contents for Pharmaceutical Pricing Strategies
Executive Summary 12
The importance of price optimization 12
Pricing and reimbursement in North America 13
Pricing and reimbursement in Europe 14
Pricing and reimbursement in Japan and the rest of the world 15
Pricing strategies for new drugs 16
Pricing strategies for established drugs 17
Chapter 1 The importance of price optimization 20
Summary 20
Introduction 21
Maximizing return on investment 21
R&D productivity shortfall 21
Key patent expiries 25
Healthcare cost containment 28
Cost-containment initiatives 30
Cost containment in pharmaceutical expenditure 30
Key issues 32
Price optimization 32
Reimbursement regulations 33
Reference pricing 37
Pharmacoeconomic evaluations 39
Parallel imports 42
Generic substitution 44
Hot topics 46
US reimportation 46
Medicare Drug Benefit 47
EU enlargement 48
Price harmonization 48
Pricing and reimbursement hurdles 49
Chapter 2 Pricing and reimbursement in North America 51
Summary 51
Introduction 52
US pricing regulations 52
Medicare 53
Medicaid 55
Private healthcare 56
Recent developments in the US 57
The 2003 Medicare Prescription Drug Act 58
Expanded access… 60
Improved drug compliance… 60
Higher utilization… 61
Price comparison tool… 62
Medicare drug benefit formularies… 62
Medicaid budget crisis 63
Price controls in Maine? 65
Florida’s Medicaid drug rebates 68
Pharmacoeconomics in the US 69
Pharmacoeconomics in public healthcare provision 69
Pharmacoeconomics in private healthcare provision 69
Managed care pharmacoeconomic submissions 70
Future use of pharmacoeconomics in the US 71
Parallel imports in the US 73
Developments in cross-border trade 76
Reimportation task force report… 76
State-level action… 78
Generic substitution in the US 79
The Waxman-Hatch Act 79
Pediatric exclusivity provisions 80
Anti-competition agreements 82
Delaying tactics and 180-day exclusivity 84
Biogenerics 85
Trends in generic usage 87
‘March-in’ law… 87
Future pricing scenarios in the US 87
Best case pricing scenario 88
Worst case pricing scenario 89
Most likely pricing scenario 89
Canadian pricing regulations 90
Federal measures 91
Provincial measures 92
Driving down prices 93
Reimportation 94
Chapter 3 Pricing and reimbursement in Europe 97
Summary 97
Introduction 98
European pricing regulations 98
France 100
Recent developments… 102
Germany 104
Recent developments… 105
Italy 108
Recent developments… 110
Spain 113
Recent developments… 115
The UK 120
Recent developments… 120
Pharmacoeconomics in Europe 122
France 123
Germany 124
Italy 125
Spain 126
UK 127
Parallel importing in Europe 131
Penetration of parallel imports 132
Price differentials… 132
Initiatives to encourage use of parallel imports… 133
Ability to obtain a license to import products… 133
Regulations and key legal decisions 133
Merck versus Stephar… 134
Bayer (Adalat)… 134
Bristol-Myers Squibb versus Paranova… 134
The Silhouette case… 135
The Maglite case… 135
The Davidoff case… 136
Recent developments 136
GSK’s supply restriction in Greece… 136
Lack of regulatory framework in France… 137
Novo Nordisk’s supply of Actrapid Novolet in Spain… 138
Pfizer’s direct distribution to pharmacies in Spain… 138
Generic substitution in Europe 139
The mutual recognition procedure 141
Future changes in European generics legislation 142
Government initiatives encouraging generic uptake 144
EU accession 144
Drug pricing policies and reimbursement post-accession 146
Parallel trade post-accession 147
Generics post-accession 149
Future pricing scenarios in Europe 151
Best case pricing scenario 151
Worst case pricing scenario 152
Most likely pricing scenario 153
Chapter 4 Pricing and reimbursement in
Japan and the rest of the world 156
Summary 156
Introduction 157
Japanese pricing regulations 157
Recent developments 159
Pharmacoeconomics in Japan 162
Parallel importing in Japan 163
Generic substitution in Japan 164
Future pricing scenarios in Japan 165
Best case pricing scenario 166
Worst case pricing scenario 166
Most likely pricing scenario 167
Australian pricing regulations 168
Benchmark pricing 170
Cost plus method 170
Average monthly treatment cost 171
Prices for new items 171
Chinese pricing regulations 171
Chapter 5 Pricing strategies for new drugs 174
Summary 174
Introduction 175
Pricing strategies in early-stage development 175
Therapy area analysis 177
Epidemiology analysis 177
Treatment delivery analysis 177
Market needs analysis 178
Pricing analysis 178
Cost analysis 178
Economic analysis 179
Decision-maker analysis 182
Market research 183
Initial assessment of drug candidates 184
Pricing strategies in mid stage development 186
Evaluating opportunities 187
Case study: Aventis appeal against NICE… 190
Improving product value 191
Case study: Johnson & Johnson’s Concerta… 191
Pricing strategies in late stage development 192
Sub-population analysis 193
Choosing outcomes 194
Case study: Merck’s Zocor (simvastatin)… 195
Patient reported outcomes 196
Case study: Pfizer’s Viagra… 197
Head-to-head trials 198
Phase III pharmacoeconomic studies 200
Phase IV studies 202
Pricing strategies for new product approvals 204
Submission dossiers 204
Identifying key decision makers 206
Failure to secure reimbursement 207
Working with decision makers… 207
Case study – Eli Lilly’s Xigris… 208
Applying pressure through lobbying… 209
Case study – Amgen’s Aranesp… 209
Brokering deals… 211
Case study – Celebrex in France… 212
External support 213
EU launch order 213
First choice countries… 215
Second choice countries… 215
Third choice countries… 216
Fourth choice countries… 217
Global price optimization 217
Chapter 6 Pricing strategies for established drugs 221
Summary 221
Introduction 222
Strategic pricing of reformulations 222
Benchmarking relative pricing 222
Patient expansion strategies 224
Patient switching and generic defence strategies 226
Generic defence reformulations 231
Strategic pricing at patent expiry 232
US patent expiry 233
European patent expiry 233
Chapter 7 Appendix 236
Glossary 236
Sources 238
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